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HDI can enrich the European policy debate but also to complement other indicators such as GDP

In 2009, the world regions performing well in terms of HDI are the following: USA, Canada, Australia, New Zealand, and EU27+4. As for countries, Norway gets the highest rank

Observations for policy

People are the real wealth in Europe. Within this context, the Human Development Index is an important improvement for policy debates, but also to complement other indicators such as GDP.

Policy context

It is commonly accepted to say that GDP is a powerful and indicator to monitors short to medium term fluctuations in economic activity, notably in the current recession. It is the best known measure of macro-economic activity. GDP has also come to be regarded as a proxy indicator for overall societal development and progress in general. As the EU level, many policy decisions and instruments are based on GDP. In the current global economic downturn, restoring economic growth is a major concern and GDP growth is a key indicator to assess the effectiveness of the EU policies, but also as recovery measure for national governments.

However, GDP is not meant to be an accurate measure economic and social performance, or even to possess the ability to tackle issues such as climate change, resource efficiency or social inclusion. In this sense, GDP needs to be complemented with other statistics on economic, social and environmental issues to understand people’s well-being. A wide debate on additional complementary indicators has started some time ago with the 2009 EC communication on ‘GDP beyond measuring progress in a changing world’.

Map interpretation

The Human Development Index (HDI) for 2009 has been constructed by the United Nations using indicators available worldwide. It is widely accepted by the international community as a useful measure to understand human well-being.

In 2009, EU 27+4, Northern America and Austria, Japan and New Zealand belong to areas with particularly high HDI. Norway leads the whole world, with Iceland in third place. Other highly-placed countries behind ESPON are Ireland (5), Netherlands (6), Sweden (7), France (8), Switzerland (9), Luxembourg (11), Finland (12), Austria (14), Spain (15), Denmark (16), Belgium (17), Italy (18), Liechtenstein (19), UK (21), Germany (22), and Greece (25). Five more countries are with these in the group of 38 countries ranked as having a very high HDI.

The remaining EU27+4 feature in the next band with a high HDI, and the lowest ranked being Romania at 63 globally. In other words together the 31 countries involved in ESPON account for just about half of the top ranked-countries in the world.

Moreover, the map reveals a sharp divining line between Europe and its Southern neighbourhood. Another major dividing line can be observed in the Sahara, between Northern Africa and the Sub-Saharan countries.

Concepts and methods

HDI is a good entry point to understand the different aspects of human well-being. This indicator measures the average achievements in a country on three basic dimensions of human development: (1) long and healthy life, (2) knowledge (measured by the adult literacy rate and the combined gross enrolment ratio on primary, secondary and tertiary schools), and (3) a decent standard of living (measured by the algorithm of GDP per capita in PPP).